Why Investors Feel Glum Even as Markets Flirt With Records
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What is the main topic discussed in this episode?
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York. The stock market seems to have shaken off its doldrums for the most part and now flirts with record territory. So why are Wall Street analysts feeling so negative about the next six months? In a moment, we'll ask a Journal Markets reporter to set the record straight. First, these money and market stories you should know. Consumers will be privy to more information on their out-of-pocket health care costs under an executive order signed by President Trump. Hospitals will be required to publicize their negotiated rates with insurers, and health care providers and insurers would give patients information on the out-of-pocket costs that they'll face before they receive health care services.
Why are investors gloomy even as markets approach record highs?
Typically, hospitals and insurers closely guard the discounted rates and payment contracts, and they're generally bound by confidentiality agreements. And we've reported here before that the number of U.S. job openings in April outnumbered the number of unemployed Americans by about 1.6 million. That's the largest gap on record going back to 2000. Well, now the Labor Department wants to entice Americans to come off the sidelines and join the labor force. It's proposed a new form of apprenticeship that would be run by business groups, colleges, and other groups rather than by the federal government. Apprenticeships combine on-the-job training and classroom education, and apprentices earn an average of $15.36 an hour.
Once they complete their training, which normally takes a year or more, they can be hired for full-time jobs in their industry. The proposal still has to go through a few layers of the approval process.
On Wall Street, these are the best of times and these are the worst of times. Markets are hitting new records and that would normally bring feelings of elation. But investors and money managers have a dim view as to where the market is headed for the rest of the year. Let's bring in Wall Street Journal reporter Akani Ohtani to explain. So Akani, I guess the next time I see a money manager with her head down, I should just ask, why so glum, chum?
What recent policy and labor headlines could affect investor sentiment?
Yeah.
And it would probably be a pretty common question to ask at this point. I mean, the surveys that we look at are indicating that both among individuals and professional money managers, sentiment is pretty bad at the moment. So one survey that we follow, the American Association of Individual Investors, finds that the share of individuals who believe the stock market's going to rise over the next six months has held below 30% for six consecutive weeks, which is actually the longest streak since the lead up to the 2016 elections.
But wait a minute. So the markets have been through the ringer here. You know, they're flirting with record territory. I get that. But to get there, they've responded as we would expect. They've given up ground amid tariff threats, Middle East tensions and an indecisive Federal Reserve. The markets have shown some discipline on the way up.
Yeah, and I think that's the sort of unsettling dynamic that investors are grappling with at the moment. I mean, on the one hand, it seems like markets are responding logically to the challenges that we've all been facing the last couple of months. But on the other hand, even with stocks at all-time highs, there are a number of uncertainties that are still lingering. Besides the things that you mentioned, the chief one probably being the trade tensions between the U.S. and China, which will really come to the forefront in the next couple of days as the two countries prepare to meet at the G20 meeting. And how those talks go is really some of the biggest sort of sources of stress, I think, for a lot of investors at the moment, because all the things that we've been talking about the last couple of months, from slowing global growth to the path the Fed is going to take, are really going to be affected by the outcome of the trade talks.
So if Donald Trump and Xi Jinping meet at the G20, if there's no negative news coming out of that, that could unlock some optimism that could be bottled up right now?
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:05–0:47
2
Why are investors gloomy even as markets approach record highs?
0:47–2:12
3
What recent policy and labor headlines could affect investor sentiment?
2:12–5:15
4
How do job openings and new apprenticeship proposals factor into the economy?
5:15–6:46
Speakers
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